Domain Industry News

2010 Domain Industry Predictions

I was asked by the editor of Website Magazine to give some domain industry predictions for 2010 for their Web Trends for 2010 article. My quote from the article is below, but I am also interested in hearing what your predictions are for the upcoming year.

“As reported in the December issue of Website Magazine, businesses have increasing opportunities in the domains industry. Elliot Silver, president of Top Notch Domains and Silver Internet Ventures agrees. “High-value keyword names like toys.com and candy.com, which sold this past year, will continue to command high prices. Companies will continue to invest in their own businesses and will acquire high-value keyword domains names for growth and for competitive reasons,” Silver says. “With PPC revenue down and not looking like it will increase in the near future, some domain owners will make top domains available for acquisitions that haven’t been available in many years.”

In addition, the Microsoft-Yahoo! deal will affect the domain industry, according to Silver. “The Microsoft and Yahoo! deal is going to be impactful on domain name values because Microsoft’s Bing tends to rank developed keyword domain names higher than Google and Yahoo!,” he says. “Right now, impact is minimal because of Bing’s relatively low market share. With the deal, Bing will manage search results for Yahoo!, bringing the market share to 30 percent of search from around 8 percent. This is significant.”

What are your predictions for the domain business in 2010?

Valuate.com Adds Trademark Checker

Valuate.com has launched a trademark checker engine in conjunction with their domain evaluation system powered by Estibot. When you enter domain names that appear to have trademark issues – be it a Fortune 1000 company or brand, there will be an error message notification letting you know the system has detected a trademark.

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When I am searching for a domain name and think there could potentially be a trademark issue, I search the United States Patent and Trademark Office’s TESS, which is a database of live and dead US trademarks. It’s important to note that not every system is accurate, and you should seek professional legal advice if you have questions.

Obviously TheGoogle.com would be a TM issue, but the system didn’t target Windows.com as a potential trademark. Of course, a glass company could legitimately use Windows.com, but a computer company other than Microsoft would probably have issues if it was used.

One reason I like the offering is that many people who are new to the industry don’t know much about trademark issues – or don’t think of them as a potential problem. I’ve been upfront about stupidly hand registering some names with trademarks back in 2003. I didn’t really know any better at the time. With this offering, people who want to check on a new registration like GoogleBusinessServices.com or something like that will get the warning that the name could be risky to own.

Taking Valuate.com for a Test Drive

When I visited Domaining.com yesterday, I saw the headline announcing the launch of Valuate.com, a sister website of Domaining.com and a domain valuation tool that is run using Estibot 2.0. Users are allowed to look up 50 domain names if they aren’t registered users of Domaining.com and 200 if they are logged in to their Domaining.com account. This is the Beta version of the site, with the full launch expected to come in December.

One of the easiest ways to do a comparison of domain values is to compare recent domain sales from DN Journal with the results from Valuate.com. Since a domain name’s actual value is derived from what someone would pay for a domain name, one can infer that the recent sales price is close to its valuation. I wanted to take the new site for a test drive to see the results, and I figured using recent sales would be the most fair way to compare.

Below are some recent sales along with their prices and the Valuate.com valuation. I also added a few of my domain names to see how they are valued.

Domain Name | Sales Price | Valuate.com Valuation
Resumes.com | $400,000 | $910,000
Candy.com | $3,000,000 | $3,080,000
Bubbler.com | $10,000 | $10,000
Exterminator.com | $600,000 | $620,000
Ticket.com | $1,535,000 | $2,600,000
Luck.com | $675,000 | $690,000
Voodoo.com | $300,000 | $320,000
Jets.com | $375,000 | $620,000
Christian.com | $600,000 | $1,300,000
ChinaTours.com | $200,000 | $210,000
800.com | $250,000 | $260,000
Physicians.com | $250,000 | $700,000
DiamondRings.com | $228,420 | $1,970,000
Brazil.com | $500,000 | $630,000
FreeQuotes.com | $210,000 | $220,000
Snowboards.net | $30,000 | $31,000
Science.org | $20,000 | $29,000
LMK.com | $58,500 | $60,000

Some of my companies’ investments:
Torah.com | N/A | $110,000
Burbank.com | N/A | $160,000
Dreidel.com | N/A | $25,000
AthensVacations.com | N/A | $15,000
DubrovnikVacations.com | N/A | $1,000
CabCompanies.com | N/A | $2,200
CatOwner.com | N/A | $1,200
Oenophiles.com | N/A | $4,100
TropicalBirds.com | N/A | $2,800

Overall, some of the values seem to be fairly on point, although I wouldn’t sell a few of them at close to the valuation (TropicalBirds.com for example).   My domain names were private acquisitions (except for Lowell.com), so there probably isn’t an element of human intervention with these values.

One thing I disagree with is the disclaimer, “We DON’T valuate businesses, we DON’T valuate sites.” Although it may not provide valuation on websites, the value takes traffic and incoming links into consideration. By default, developed sites have more of these valuable attributes, which could cause the value to increase. One could argue that the domain name ElliotsBlog.com is worth a few hundred dollars to someone else named Elliot who wants a blog. However, Valuate.com gives ElliotsBlog.com a valuation of $9,200, presumably because of the traffic and site ranking.

One way to really test its accuracy will be to rate the values of pending domain auction names before and after. This will let you see how accurate the system is – and it will also tell you if there are human filters correcting errors.

Here are some Valuate.com valuations of domain names that are up for auction this week during the Traffic show:

40.com – $62,000
900.com – $12,000
Arbitration.com – $250,000
Bands.com – $520,000
Boy.com – $620,000
CigarBars.com – $6,200
DataCenters.com – $27,000
EuropeanVacation.com – $35,000
GolfClubs.com – $410,000
Hookahs.com – $15,000
Marketers.com – $2,000
OfficeSupply.com – $110,000
Penpals.com – $22,000
QB.com – $15,000
ScubaDiver.com – $9,700
SecondMortgage.com – $140,000
SkyDiver.com – $4,100
TreasuryBonds.com – $40,000
WineCellar.com – $56,000
Zimbabwe.com – $410,000

Clearly, some of these valuations are way off. I’m no baller, but I would buy Hookahs.com, Marketers.com, QB.com, 900.com, ScubaDiver.com, SkyDiver.com, and WineCellar.com at those prices right now without even thinking about it twice.

A while back, I discussed Estibot and how I don’t think you can ever rely on the results of an automated website to get accurate domain valuations. I still agree with this, but I think Valuate.com can provide an additional sanity check when buying a domain name.

Francois recently put Domaining.com up for sale with an asking price of $3,000,000. Valuate.com only pegs the value at $110,000. As we all know, the only real way to value a domain name is by offering it for sale and seeing what someone will pay for it!

Long Island Business News Article About Domain Industry

There was an article in Long Island Business News yesterday focusing primarily on Andrew Hazen, a Long Island Internet marketer and domain investor. The article discussed how Andrew got started with his domain investments and on how domain investors are finding success. Although the article requires a subscription, you can read a free version, here.

In addition to information about Andrew, the article also quoted Mike “Zappy” Zapolin about his company’s Beer.com purchase for $80,000 and subsequent sale for $7,000,000.

I was also quoted in the article:

“Elliot Silver, chief executive of Manhattan’s Top Notch Domains, is not as gung ho as Zapolin. “There’s no such thing as easy money in the domain investment industry, but if you know what you’re doing and take calculated risks, it can be lucrative,” Silver said.”

When the reporter reached out to me, it seemed that it was going to be an article about how lucrative the industry is. Based on first hand experience and observation, I know it’s not as simple as it seems to make money. I hate to be the “Debbie downer” but I don’t like to see people blindly enter our industry thinking they are easily going to get rich by buying and selling domain names. I’m no rocket scientist, but it did take a few years before I was able to do this full time.

One recommendation I have for anyone who is just getting involved in the industry or anyone who wants to grow their domain investment business, is to read advice from successful domain owners.

Thoughts at the End of the Week

As the week is coming to a close, I wanted to write a little bit about a few things that I thought about this past week. I bet some of you are thinking the same thing, and I welcome your thoughts in the comment section as always.

I booked my flight to New Orleans for Domainer Mardi Gras in February. For those of you from New York, Jet Blue is offering round trip tickets for around $229 after taxes – not a bad deal at all.

I wish DN Journal accepted comments. There are so many great articles and news stories posted by Ron, and it would be great if we had the ability to discuss some of them on site. I bet this would surely be a big traffic driver and would be interesting to many.

It really annoys me when bloggers and other news outlets have a comment section and don’t approve them – or they only approve the favorable comments. I wonder if these people are naive enough to think that nobody notices this – or if they simply don’t want to feel put down by people that disagree with what they are saying.

I don’t think people should develop domain names simply because others are doing it. The reason I develop mini sites is that I am a full time domain investor, and this is a way to build/add value to my domain assets in a down market. The reason I fully develop geodomains – and will be developing Torah.com (very soon) is to build businesses on them so. Anyone can sell a good domain name, but not everyone can build and manage a business. I want to challenge myself while building a revenue stream for the future, and this is an ongoing process.

If you are going to make it as a domain investor, you need to look outside of the typical domain “hang outs.” Check out webmaster forums, browse SEO websites, read up on new technology, and think about things differently than others.

I believe there are many good potential domain deals in the high end of the industry, but most of the low hanging fruit under six figures has been picked, and there aren’t nearly as many deals to be had in that area. You need to have steel stones to invest in 6 figure + domain names these days without a development/business plan, and you need a back up plan if your primary plan is to flip them.

    NY Domainer Get Together – 9/24

    If you live in the New York area, mark your calendars because we are getting together on September 24th at 6:30pm at the Boat Basin on West 79th Street and the Hudson River. There are no special requirements to attend, and there is no admission cost (although it’s a cash bar).

    If you are interested in sponsoring the event via buying pitchers of drinks or appetizers, shoot me an email or simply show up. Past events have drawn around 40-50 people, and they are always relaxed. There’s no need to know anyone beforehand. If you live in the New York area, and you are a domain investor or work in the domain space, this is a great chance to meet like-minded people.

    Please drop a comment if you can make it – and I will add your email address to the Evite I am going to send out shortly. See you there.

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